3|Financial Modeling and Funding

Before we work to secure funding, you must understand what funding is needed and what operating income might be realized. To understand the budget needs, you should conduct a financial feasibility analysis of your project. Even if you are engaging a consultant to help with securing funding, it is important that multiple members of your development team understand the different components of the financial model so you can use the information most effectively.

You will learn the components of a pro forma workbook to test and analyze the impact of changes to your development model or addition of different funding sources on your project’s financial feasibility. Ultimately, you will use the pro forma to demonstrate to funders that your project is worthy of their investment.

Many affordable housing projects need to engage a consultant or technical assistance provider to perform a full financial analysis to demonstrate that a project is a sound investment. Engaging an expert to perform a financial analysis is another opportunity to learn from an experienced partner and build capacity for financial analysis in-house. All development partners should also be involved in the financial feasibility assessment process to ensure they understand and are able to communicate the results.